Assessing Pharma Mar (BME:PHM) Valuation After Zepzelca Milestones And Strong 2025 Growth Update

Pharma Mar (BME:PHM) has drawn fresh attention after its 2025 results update, with management pointing to 27% revenue growth, a fivefold jump in EBITDA, and key regulatory progress for oncology drug Zepzelca.

See our latest analysis for Pharma Mar.

The share price has risen over recent months, with a 30 day share price return of 6.73% and a 90 day return of 7.72%. However, the 1 year total shareholder return is a 9.03% decline and the 3 year total shareholder return is 83.97%, suggesting investors are reacting to the 2025 update and oncology pipeline progress while still weighing earlier setbacks.

If Pharma Mar’s recent move has you thinking about where growth stories might emerge next, you may want to scan our 121 healthcare AI stocks as potential new ideas to research.

So with the shares up over the last quarter, a 1 year total return still in decline, and analysts implying upside from the current €81.65 level, is Pharma Mar undervalued or already pricing in future growth?

Price-to-Earnings of 41.3x: Is it justified?

Pharma Mar closed at €81.65 and is on a P/E of 41.3x, while our SWS DCF model suggests the shares are trading at a discount to an estimated value of €113.19.

The P/E ratio compares the current share price to the company’s earnings per share and is a common way to see how much investors are paying for each euro of profit. For Pharma Mar, that 41.3x P/E is higher than both the European biotechs industry average of 16.5x and the peer average of 28.4x. This indicates the market is pricing in stronger earnings prospects than many similar names.

However, our DCF model, which projects future cash flows and discounts them back to today using assumptions about growth and risk, points to a different conclusion. On that measure, Pharma Mar at €81.65 is trading below an estimated future cash flow value of €113.19. This frames the current share price as a discount to that cash flow based view.

This gap between a relatively expensive P/E ratio and a DCF estimate that sits higher than today’s price suggests investors are paying up on reported earnings, while the cash flow based model still sees room for value if its assumptions are met. The fair P/E ratio implied by our analysis is 36.5x, meaning the current 41.3x sits above a level the market could move toward if sentiment cools or if earnings do not track current expectations.

Explore the SWS fair ratio for Pharma Mar

Result: Price-to-Earnings of 41.3x (OVERVALUED)

However, you still have to weigh the binary nature of oncology trial outcomes, as well as the reliance on a relatively concentrated portfolio of cancer drugs and candidates.

Find out about the key risks to this Pharma Mar narrative.

Another view from the SWS DCF model

While the 41.3x P/E makes Pharma Mar look expensive against the biotechs industry, our DCF model tells a different story. At €81.65, the shares sit around 27.9% below an estimated future cash flow value of €113.19, which presents the stock as potentially undervalued using this method.

That gap raises a simple question for you as an investor: is the market overpaying for current earnings, or underappreciating the cash flows analysts expect Pharma Mar to generate over time?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Pharma Mar for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 227 high quality undervalued stocks. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

Next Steps

If all of this feels mixed, that is the point. You can move quickly from headline numbers to your own view by checking the company’s 4 key rewards.

Looking for more investment ideas?

If this update has sharpened your view on Pharma Mar, do not stop here. Broaden your watchlist with a few other focused sets of opportunities.

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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